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Vital Healthcare's profit up 21 per cent

NZ Newswire logoNZ Newswire 10/08/2016 Jonathan Underhill

Vital Healthcare Property Trust, which raised $160 million last month to help fund its growth strategy, has reported a 21 per cent gain in full-year profit.

Profit rose to $117m in the year ended June 30, from $96.5m a year earlier, the Auckland-based hospital and healthcare property developer and investor said on Thursday.

Net property income rose to $68m from $59m and the trust recognised a $102m revaluation gain on investment property, following an $84m gain a year earlier.

Vital raised funds in a rights offer last month to repay debt and support its push for more scale and diversification.

On Thursday it flagged $A83m ($NZ89m) of new brownfield development projects across its Australian private hospital portfolio and said it was targeting $A20m of strategic acquisitions. Following the latest portfolio revaluation, the trust's investment properties are now valued at about $952m.

"Brownfield development activity over the last few years has been transformational in delivering significant financial and portfolio outcomes for investors," said Graeme Horsley, chairman of the trust's manager, Vital Healthcare Management.

The trust will pay a final quarter cash distribution of 2.125 cents a unit, bringing payments for the year to 8.2c. It affirmed guidance for the same sized payment in 2017.

Distributable income rose about 11 per cent to $40.2m in the latest year.

Finance expenses rose 25 percent to $15.2m, which the trust said reflected higher overall debt levels.

The loan-to-value ratio rose to 36.3 percent at June 30, from 32.9 percent a year earlier.

Other expenses rose by $4m to $15m, including management and incentive fees of $12.5m. It said the incentive fee of $6.3m, to be paid via the issuance of more units to the manager, was based on the average growth in the value of the trust's assets over the past three years.

The units last traded at $2.26 and have climbed 22 per cent this year.

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